Fact-check
Worked founder-exit claim on what gross sale is needed to keep $10 million after tax
This post turns a founder-exit comparison into a clean intergenerational headline. The broad direction is real: under a no-relief top-rate scenario, a founder selling after the post-2027 CGT redesign needs a materially larger gross exit to keep the same after-tax amount than a founder selling under the old 50 per cent discount. But the quoted dollar figures depend on hidden assumptions about ownership structure, marginal rate, Medicare, concession eligibility, cost base, and whether the entire gain sits under one regime. The '$13m' figure is broadly consistent with a top-rate no-relief pre-reform exit; the '$20m' figure overstates the simple no-relief post-2027 arithmetic, which lands closer to $18.9m before any rounding or extra assumptions.
1 supported 1 unsupported 1 requires assumptions 1 rhetorical
Prefills a top-rate founder-style exit so the gross sale needed to clear a $10 million after-tax target can be pressure-tested under the post-2027 regime.
Per-claim verification
requires assumptions 86% confidence
A founder selling under the old discount regime would need roughly a $13 million gross exit to keep $10 million after tax.
“25yo started a business in 2016. Sells it ten year later. Keeps $10m after tax. How big did the exit need to be? $13m.”
That figure is broadly consistent with a simple top-marginal-rate individual scenario under the old 50 per cent CGT discount, where an effective 23.5 per cent tax on the gross gain implies a gross exit of about $13.07 million to net $10 million. But the post does not disclose the assumptions needed to make that arithmetic meaningful, including ownership structure, Medicare inclusion, zero or low cost base, no small business CGT concessions, and full use of the pre-1 July 2027 discount regime.
Assumptions required
- Assumes an individual founder taxed at the top marginal rate with the 50 per cent CGT discount applying.
- Assumes no Subdivision 152 or other concession reduces the gain.
- Assumes a zero or low cost base and a sale occurring before the post-1 July 2027 redesign bites.
Alternative defensible framings
- Under a simple top-rate no-relief scenario, the old regime gets a founder to $10 million net at around a $13.1 million gross exit.
unsupported 88% confidence
A founder selling ten years after starting in 2026 would need a $20 million gross exit to keep $10 million after tax.
“25yo starts a business in 2026. Sells it ten year later. Keeps $10m after tax. How big did the exit need to be? $20m.”
Under a simple no-relief top-marginal-rate post-2027 scenario, keeping $10 million after tax implies a gross exit closer to $18.9 million, not $20 million. The quoted $20 million figure could only be justified by extra assumptions or heavy rounding the post does not disclose. That makes the headline number too strong as stated.
Alternative defensible framings
- Under a simple top-rate no-relief post-2027 scenario, a founder needs roughly a $19 million gross exit to keep $10 million after tax.
- The required gross exit can be higher or lower depending on cost base, concession eligibility, and whether the gain is fully post-2027.
supported 91% confidence
Holding other things equal, a no-relief founder selling under the post-2027 regime needs a materially larger gross exit than one selling under the old discount regime to keep the same after-tax amount.
“When would you rather have been a 25yo entrepreneur starting a business?”
The shift from the 50 per cent discount to indexation plus a 30 per cent minimum tax raises effective tax in standard no-relief founder-exit scenarios at the top marginal rate. That means the gross sale needed to preserve the same after-tax target rises materially under the new regime, even though the exact number depends on assumptions.
Alternative defensible framings
- In clean no-relief founder examples, the post-2027 regime requires a meaningfully larger exit to land the same net proceeds.
rhetorical 92% confidence
Calling this outcome intergenerational equity is self-evidently absurd.
“Albo calls this 'intergenerational equity'.”
This is a political characterisation about how the reform should be morally framed rather than a discrete factual proposition that can be resolved from the primary source set alone.
Alternative defensible framings
- The worked example is being used to argue that the reform cuts against the Government's intergenerational-equity framing.